Lecture 2 Prof Arkonac's slides (Ch 2) for Eco 4000

# Lecture 2 Prof Arkonac's slides (Ch 2) for Eco 4000 - ECO...

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ECO 4000, Statistical Analysis for Economics and Finance Fall 2010 Lecture 2 Prof: Seyhan Arkonac, PhD

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What is a Random Variable? Gender of the next newborn baby Number of times your computer will crash while you are writing a term paper Number of times your wallet is stolen during four years of college Age of next 10 th customer at a store Gender of the next 20 th caller Eye color of the next Lottery winner
A Random Variable is a numerical summary of a random outcome Let M be the number of times your computer will crash while writing a paper Then M may take values from 0 to say 4 (This is an example to a Discrete random Variable) why? What is an example of a continuous RV?

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Continuous Random Variable examples: Height of people Weight of people Amount of money people earn Continuous RV takes on a continuum of possible values (once measured and recorded it will become discrete)
Probability Distribution of a discrete RV is the list of all possible values of the variable and the probability that the each value will occur Cumulative Probability distribution: is the probability that the RV is ≤ a particular value See the following computer crash example:

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Probability Distribution of a continuous RV is not suitable for continuous RV, instead the probability is summarized by probability density function (pdf) Cumulative Probability distribution: is the probability that the RV is ≤ a particular value (same as in discrete RV case) See the following commuting times example:
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Now let’s go back to the relationship between class size and educational output : Empirical problem: Class size and educational output Policy question:
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## This note was uploaded on 05/05/2011 for the course ECON 4000 taught by Professor Arkonac during the Spring '11 term at CUNY Baruch.

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Lecture 2 Prof Arkonac's slides (Ch 2) for Eco 4000 - ECO...

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